Principles for a Balanced Pension Reform

As we enter the critical years of an ageing population, it is actually five minutes to midnight to reform the pension system if we want to ensure adequate pensions for current and future generations. The affordability of the pension system as it stands today is under pressure, and it seems as if the population, young and old, is not sufficiently aware of the consequences the status quo might have on their standard of living. There is also strong social resistance to pension reforms that are perceived as unbalanced.

In Belgium, as in other European countries, the debate on financing intergenerational solidarity has been going on for several decades, and a reasonably balanced proposal for pension reform was already drawn up by the Pension Reform Commission, which, however, remained dead letter.

This LIAS working group is exploring what the starting points for a balanced and socially just pension reform could be. In doing so, the first step is to clarify what a pension system should be for, and how it can be realised in a socially just and inclusive way, with solidarity both between and within generations. How should uncertainties regarding life expectancy and longevity be dealt with, and in what way are actuarial corrections to be applied when determining the pension amount? How can a pension system provide insight into the relationship between the amount of pension and the collective length of the average career and thus contribute to support for the policy pursued? What role does social dialogue play in the pension debate, and why does a reform find so little popular support?

Although Belgian data are not available to present a comprehensive simulation of possible reforms, it is possible to reflect on the principles of a pension reform. The Leuven working group aims to submit a discussion text on these principles to international colleagues in autumn 2023.

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FELLOWS

International Fellows are invited to LIAS for interdisciplinary consultation with Leuven experts.

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A healthy public debate about important societal challenges requires a common and scientifically sound basis.

Bart Pattyn

Co-Chair LIAS and member Board LIAS Foundation
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